ditchwitch Yes it is legal. Let me try and explain it based on what I have read. This works for many crops but I will stick with rice.
The program is direct payments. Lets say I own 200 acres of land that I farm rice on. I use to get disaster payments to help we threw bad years. In a effort to wean me off these disaster payments the government came up with the lower direct payments. I get this in good years and bad years.
Now rice has hit rock bottom. No problem. I will just start raising corn; or cattle; or pine trees. But since the land was once used to farm rice I can still get the rice direct payments. So now I get payments from the government to farm rice and grow a crop that makes me more than rice did.
Now not only is rice hit rock bottom but farming has hit rock bottom. The city is moving closer so I can get a good price for my land so I sell out. You buy 10 acres of my land once farmed in rice; build a house on 1 acre and call the other 9 acres farm land cause you have a horse. So now you get the rice direct payment on the 9 acres. On top of that since you get federal payments on the 9 acres it is considered agriculture land and you pay lower property taxes on that 9 acres; and try as they may there is nothing the state can do to raise your property taxes to residential on that 9 acres.
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